Few real estate rental markets can present the same of the constant demand for rental homes like in a college town. Still, there are several things to realize before aiming to invest in a rental property in these areas. No two college towns are exactly alike, and different types of institutions will influence an owner’s ability to competitively rent off-campus housing. Although with consistent demand and the ability for it to appreciate well, investing in one or more rental homes close to a college or university can be an effective way to achieve your long-term financial goals.
Throughout the United States, every college city has one thing in common: the students, faculty, and staff who lodge there all searching for housing close to campus. Such a basic requirement can make buying an investment property in a college town seem like an attractive option. While this is practically the motive, there are some invaluable criteria you must research before beginning your property search.
For example, it is wise to research the campus and surrounding community before choosing one town over another. Gathering information on enrollment history, the projected growth of the school, current and projected ratio of students to on-campus housing, and any planned developments can help you estimate the current and future potential of any given area. If a school has shrinking enrollments or is opening a second campus in another community, both could kick off a sharp decrease in demand for off-campus housing. Things like this are essential to obtain before investing in any university community.
Another important factor to consider is the type of institution that is at the core of the town or city. Private universities and colleges may have strict housing policies and more on-campus housing available, thereby reducing the need for off-campus options. Public universities, however, might have less on-campus housing when compared to the number of students attending, but may have a high percentage of local, part-time, or commuting students who do not require or need a house close to campus. These are all factors you should learn before aiming whether or not to invest in a rental property in a college town.
It is furthermore invaluable to evaluate the area’s available investment properties to ensure that any potential options have features commonly found in profitable rentals. The condition of the house and the encompassing area are among the most critical factors. Crime rates, amenities, age of the house, and most recent updates will all influence your ability to attract tenants and charge a competitive rental rate. Another urgent feature is understanding the tax implications of your purchase. The amount of property tax, both current and future, must be included in the cost of owning the property, as must any required homeowners’ association fees. You should also confirm for any restrictive codes or laws that might prohibit you from renting out the property; each city and town has its own set of regulations that can vary widely from place to place.
If your research is promising and you desire to begin with a real estate acquisition in your intended city, you can significantly narrow your search parameters if you determine early on how much you warrant to spend, how much risk you can comfortably assume, and how much time you can devote to property management. Maintaining a rental property consumes a lot of time, especially if you are planning to manage most of it yourself. Rental homes in college towns are somewhat unique in that they tend to have a high rate of turnover. If students are your target demographic, it’s invaluable to grasp that there will be a far more tasks involved in marketing, screening, and leasing your property from year to year, perhaps even semester to semester. Contrastingly, if you contemplate renting to graduate students or faculty, you will need to comprehend how to market your rental effectively to draw them to your property.
Regardless of who your target renter is, it is crucial to be sensible about your ability to do consistent and high-quality property oversight and maintenance. Property management can be a very hands-on affair, one that warrants full-time readiness should an emergency occur. If you want to manage a property yourself, you are also constrained to areas that you can enter quickly or constantly, oftentimes near to your hometown.
Other than managing it yourself is to authorize a property management company to handle your property for you. There are tangible perks to doing so, especially if you are planning to rent to students. Placing ads, interviewing renters, showing your property, performing routine maintenance, handling move-in, and move-out efficiently – all of these can be turned over to a team of professionals dedicated to protecting the value of your investment property. What is more, if you decide to choose a national company like Real Property Management Advisors, you are not limited to buying in your home market. Your investment options are unlimited with the assistance of a network of reliable property management franchise offices coast to coast.
At Real Property Management Advisors we can help property investors like you sort out if buying one or more rental properties in a college town makes sense. We have market data and industry experts who can offer the facts you need to make the best workable determination. Contact us today for more information.
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